Company Directors and Officers Insurance

If you have your own limited liability company you should check that you have appropriate insurance cover for yourself and other employees. If you are a directors or officers of a businesses then you should ask them to cover you personally via a special policy.

Director’s Liability Insurance cover protects companies’ directors, officers and senior managers against claims arising from their decisions and actions taken whilst managing the business.

Issues Leading to a Claim

· The position of director has various duties, responsibilities and powers in connection with that position. Some of the legally prescribed issues include health & safety legislation, keeping proper accounts, data protection, Harassment and discrimination and taxation matters.

· It is also sensible to get cover for fraud, negligence and theft were it can be envisioned that these matters could become claims.

· Liquidation and insolvency issues may arise after you are no longer a director and your fate could be in others hands. You may be barred as a company director as a result of successful claims and you may feel the need for an Individual Directors Liability Insurance policy.

Other Issues to Consider

The employment contracts with directors and officers should provide for the company indemnifying them against claims and the cost of defending claims to minimise their liability. There are still issues of personal liability that can’t be insured off especially on Health & Safety matters.

If you are retiring as a director or leaving ensure there is a written agreement about the cover for the period whilst you were employed as a director or officer.

‘If your business’ directors or officers are found to have inadvertently acted outside their terms of reference and this gives rise to a claim, then compensation and legal fees will be covered by directors’ and officers’ liability insurance. If the act was deliberate, then it may not be covered by the policy.’ According to Business Link.

Some sectors have bespoke insurance packages like Trustee Indemnity insurance for Charity Trustees.

Check your other insurance covers particularly Professional Indemnity Insurance, Public Liability and Umbrella cover.